Mr. Chris Johnson reports

CROWN CAPITAL PARTNERS ANNOUNCES Q1 2023 FINANCIAL RESULTS

Crown Capital Partners Inc. has released its financial results for the three months ended March 31, 2023. Crown's complete financial statements and management's discussion and analysis are available on SEDAR.

Q1 2023 financial and operating highlights:

• Network services revenue was $7.3-million, an increase of 10 per cent compared with $6.6-million in Q4 2022, largely due to the commencement of new projects at community network partners, offset by a decline in the revenues of WireIE. The network services segment contributed net income before income taxes of $800,000, inclusive of depreciation expense totalling $700,000. This compares with a net income before income taxes, excluding $600,000 of accrued decommissioning costs, of $200,000 in Q4 2022. The suppressed level of profitability in this segment in recent quarters has been consistent with expectations as the WireIE business is contracting and the growth initiatives in community network partners and Galaxy's recently announced expansion of low Earth orbit connectivity solutions are in the early stages.
• Distribution services revenue was $8.4-million, an increase of 28 per cent compared with Q4 2022, due primarily to increased capacity utilization and customer activity levels at facilities that commenced operations in 2022 and to contractual price increases that came into effect on Jan. 1, 2023. This segment contributed a net loss before income taxes of $900,000, inclusive of depreciation expense totalling $1.3-million and a $600,000 non-recurring gain resulting from the remeasurement of certain long-term debt. Overall capacity utilization was 53 per cent, compared with 39 per cent in Q4 2022. Crown expects capacity utilization to increase significantly in 2023 leading to a material increase in the revenues and profitability of this segment.
• In Q1 2023, Crown's share of earnings of Crown Partners Fund totalled $1.4-million (Q4 2022 -- loss of $700,000), including $400,000 in respect of Crown's general partnership interest as a result of an increase in the accrued performance bonus payable to Crown by the fund and $1.0-million in respect of Crown's limited partnership interest. The carrying value of Crown's investment in Crown Partners Fund decreased by $7.5-million in Q1 2023 as a result of the declaration of $8.9-million (Crown's share) of distributions in respect of loan repayments within the fund.
• Crown reported a net loss of $700,000 (loss of 13 cents per basic share) in Q1 2023, compared with a net loss of $2.6-million (loss of 38 cents per basic share) in Q1 2022.
• Total equity at the quarter-end was $49.9-million, down from $50.7-million at the end of 2022, reflecting the net loss attributable to shareholders in Q1 2023. Total equity per share decreased to $8.85 per basic share from $8.98 as at Dec. 31, 2022.
• Crown entered an agreement for a new senior secured corporate credit facility of up to $43.5-million with Canadian Western Bank.
• Subsequent to the quarter-end, Crown announced it is seeking the approval of the holders of its 6 per cent convertible unsecured subordinated debentures to amend certain terms of such debentures, as set out in its news release dated April 11, 2023, and in the management information circular relating to the special meeting of debentureholders, which is available on SEDAR. The board of directors of Crown believes that these amendments would be beneficial to debentureholders and to the corporation.

"We continue to make progress with our two main platforms -- network services and distribution services -- with both divisions securing new contracts and customers," said Chris Johnson, president and chief executive officer of Crown. "We expect revenues and profits from these two divisions to increase significantly in 2023, as well as modest contributions to revenue and profitability from Crown's other operating divisions. We are also focused on generating liquidity from our investment portfolio with the proceeds to be used to repay the convertible debentures as well as return additional capital to shareholders."

Conference call and webcast

Crown will host a conference call and webcast to discuss its Q1 2023 financial results at 11:30 a.m. ET on May 11, 2023. The call will be hosted by Mr. Johnson and Michael Overvelde, chief financial officer. To participate in the call, dial 416-764-8650 or 888-664-6383 using the conference ID No. 84346037. The webcast can be accessed on the company's website under investor relations. Listeners should access the webcast or call 10 to 15 minutes before the start time to ensure they are connected.

About Crown Capital Partners Inc.

Founded in 2000 within Crown Life Insurance Company, Crown Capital Partners is a capital partner to entrepreneurs and growth businesses mainly operating in the telecommunications infrastructure, distribution services and distributed power markets. The company focuses on growth industries that require a specialized capital partner and it aims to create long-term value by acting as both a direct investor in operating businesses serving these markets and as a manager of investment funds for institutional partners.

We seek Safe Harbor.